ANNUAL REPORT OF FLUGHAFEN ZÜRICH AG 2015 SIGNIFICANT EVENTS 2015 6 FEBRUARY 1 SEPTEMBER Welcome: Walter, Läderach, Timebox, Rituals, Changed security checks introduced KIKO Milano & Shanty Beauty Design The EU now requires random inspections with explosives detec- The Walter restaurant in the Airside Center, Läderach chocolatier tors to be conducted on passengers and their hand baggage. The suisse, as well as the shops Timebox, Rituals, KIKO Milano and security checks are being modified accordingly. Shanty Beauty Design are welcomed to Zurich Airport. 28 APRIL “The Circle” becomes reality The symbolic kick-off for construction work on “The Circle” took place in the presence of Government Councillor Ernst Stocker. The preparatory and civil engineering works for the project com- menced on 5 January 2015. 7 SEPTEMBER Zurich Airport is again Europe’s leading airport For the twelfth time in succession, Zurich Airport has received the prestigious World Travel Award for its customer-friendliness and general fulfilment of quality standards. 28 OCTOBER Opening and commissioning of Terminal 2 17 JUNE The new desks in the northern section and thus the whole of the Bombardier CS 100 visits Zurich Terminal 2 check-in hall come on stream. The completely revamped aircraft – the Bombardier CSeries ­­ CS 100 – visits Zurich Airport. This new aircraft will replace the 21 DECEMBER Avro RJ100 fleet at Swiss as of 2016. Fascination of the airport at the Swiss Museum of Transport Flughafen Zürich AG, together with Geneva Airport and EuroAir- port Basel Mulhouse Freiburg, opens the new airport exhibition at the Swiss Museum of Transport in Lucerne. 23 JULY Arrestor system at the end of runway 28 Preparations for installing an arrestor system at the end of run- way 28 get under way. It is designed to halt any aircraft that roll 31 DECEMBER over the end of the runway and will not cause any major damage. Over 26 million passengers for the first time in 2015 26.3 million passengers passed through Zurich Airport in 2015, an increase of 3.2 %. The number of flight movements remained largely unchanged owing to bigger aircraft on average and better capacity utilisation. KEY DATA (CHF 1,000) 2011 2012 2013 2014 2015 Total revenue 905,404 948,820 975,094 963,479 988,973 of which aviation revenue 579,613 596,411 601,437 574,959 597,389 of which non-aviation revenue 325,791 352,409 373,657 388,520 391,584 Operating expenses ¬ 421,462 ¬ 558,143 ¬ 448,381 ¬ 439,981 ¬ 486,157 Earnings before interest, tax, depreciation and amortisation (EBITDA) 483,942 390,677 526,713 523,498 502,816 EBITDA margin (in %) 53.5 41.2 54.0 54.3 50.8 Earnings before interest and tax (EBIT) 282,731 171,936 302,003 294,622 274,644 EBIT margin (in %) 31.2 18.1 31.0 30.6 27.8 Profit 169,845 94,732 137,052 205,921 179,807 Cash flow from operating activities 438,899 439,920 458,993 460,726 456,177 Cash flow from investing activities ¬ 449,688 ¬ 185,046 ¬ 171,239 ¬ 220,401 ¬ 119,524 Invested capital as at reporting date 1) 3,212,552 3,383,681 3,413,507 3,200,107 3,186,427 Average invested capital 1) 3,090,595 3,298,117 3,398,594 3,306,807 3,193,267 Return on average invested capital (ROIC in %) 7.3 4.1 7.1 7.1 6.8 Equity as at reporting date 1,801,777 1,859,803 2,051,618 2,140,522 2,212,437 Return on equity (in %) 9.7 5.2 7.0 9.8 8.3 Equity ratio (in %) 47.2 45.7 50.5 53.6 54.7 Interest-bearing liabilities (net) 2) 1,012,051 826,230 692,758 372,202 174,683 Interest-bearing liabilities (net) / EBITDA 2.09x 2.11x 1.32x 0.71x 0.35x Key operational data Number of passengers 24,337,954 24,802,400 24,865,138 25,477,622 26,281,228 Number of flight movements 279,001 270,027 262,227 264,970 265,095 Freight in tonnes 415,035 418,751 415,362 429,830 411,780 Number of full-time positions as at reporting date 3) 1,321 1,365 1,478 1,450 1,474 Number of employees as at reporting date 3) 1,570 1,615 1,736 1,707 1,721 Key data for shareholders of Flughafen Zürich AG Number of issued shares 6,140,375 6,140,375 6,140,375 6,140,375 6,140,375 Proposed / paid dividend per share (CHF) 4) 9.50 9.50 10.00 13.50 15.00 Dividend total (CHF 1,000) 4) 58,334 58,334 61,404 82,895 92,106 Payout ratio (in %) 4) 34.3 61.6 44.8 40.3 51.2 Equity per share (CHF) 293.43 302.88 334.12 348.60 360.31 Basic earnings per share (CHF) 27.67 15.52 22.34 33.53 29.26 Diluted earnings per share (CHF) 27.65 15.51 22.33 33.52 29.26 1 ) Invested capital includes equity, interest-bearing debt and the fair values of the hedging instruments. 2) Interest-bearing liabilities (net) include interest-bearing debt and the fair values of hedging instruments less cash and cash equivalents, interest-bearing current and non-current financial assets and fixed-term deposits. 3) From 2013 including employees of the consolidated A-port Operaciones S.A. and its subsidiaries. 4) 2015: Additional dividend from capital contribution reserves of CHF 16.00 per share not included. SHARE PRICE TREND (in CHF) Flughafen Zürich AG / Registered share / Swiss Sec. No. 1056796 / Reuters FHZN.S / SIX Symbol FHZN 800 700 600 382.00 326.00 500 400 422.80 521.50 666.50 753.50 300 200 31.12.2010 31.12.2011 31.12.2012 31.12.2013 31.12.2014 31.12.2015 KEY DATA EXCLUDING THE INFLUENCE OF AIRCRAFT NOISE Flughafen Zürich AG refinances all costs related to aircraft noise As the consolidated financial statements of Flughafen Zürich AG according to the costs-by-cause principle via noise charges. include noise charges, noise-related expenses and noise-related There is a specified purpose for these noise charges, and any sur- items in the balance sheet, key figures are also stated excluding plus, after all noise-related expenses have been paid, is supposed the influence of aircraft noise for the shareholders. In the long to be repaid and does not belong to the owners of Flughafen term, noise-related items will not impact the income statement or Zürich AG. cash flow statement of Flughafen Zürich AG. The following key data are shown excluding the influence of aircraft noise: (CHF 1,000) 2011 2012 2013 2014 2015 Total revenue 856,817 896,764 920,737 953,280 978,200 of which aviation revenue 531,026 544,355 547,080 564,760 586,616 of which non-aviation revenue 325,791 352,409 373,657 388,520 391,584 Operating expenses ¬ 417,197 ¬ 554,332 ¬ 444,494 ¬ 436,089 ¬ 385,884 Earnings before interest, tax, depreciation and amortisation (EBITDA) 439,620 342,432 476,243 517,191 592,316 EBITDA margin (in %) 51.3 38.2 51.7 54.3 60.6 Earnings before interest and tax (EBIT) 245,472 131,440 259,282 295,798 369,881 EBIT margin (in %) 28.6 14.7 28.2 31.0 37.8 Profit 149,351 80,590 96,016 211,440 269,224 Cash flow from operating activities 400,242 414,262 428,712 468,423 472,537 Cash flow from investing activities ¬ 412,127 ¬ 173,283 ¬ 165,270 ¬ 238,976 ¬ 152,129 Invested capital as at reporting date 1) 3,036,763 3,193,750 3,172,650 2,974,659 3,030,840 Average invested capital 1) 2,925,054 3,115,257 3,183,200 3,073,655 3,002,750 Return on average invested capital (ROIC in %) 6.7 3.4 6.5 7.7 9.8 Equity as at reporting date 1,625,988 1,669,872 1,810,761 1,915,074 2,076,406 Return on equity (in %) 9.5 4.9 5.5 11.3 13.5 Equity ratio (in %) 49.9 47.8 52.3 57.9 61.3 Interest-bearing liabilities (net)2) 1,257,253 1,107,887 994,706 871,017 651,169 Interest-bearing liabilities (net) / EBITDA 2.86x 3.24x 2.09x 1.68x 1.10x Key data for shareholders of Flughafen Zürich AG Payout ratio (in %) 4) 39.1 72.4 64.0 39.2 34.2 Equity per share (CHF) 264.80 271.95 294.89 311.88 338.16 Basic earnings per share (CHF) 24.33 13.20 15.65 34.43 43.83 Diluted earnings per share (CHF) 24.31 13.19 15.64 34.42 43.82 Please see left-hand page for an explanation of the footnotes. ROIC TREND (in %) PAYOUT RATIO TREND (in %) 12.0 100 9.8 10.0 80 72.4 7.7 8.0 64.0 7.3 7.1 60 51.2 7.1 6.0 61.6 6.8 6.7 6.5 39.1 40.3 40 4.1 4.0 44.8 39.2 34.3 34.2 3.4 20 2.0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 incl. aircraft noise excl. aircraft noise incl. aircraft noise excl. aircraft noise CONTENTS ADDRESS TO SHAREHOLDERS 4 CORPORATE PROFILE 7 BUSINESS DEVELOPMENT Key data 12 Results trend 14 Consolidated cash flow statement 16 Segment reporting 16 Investments and management agreements 16 Investments 17 Balance sheet structure 17 Outlook 18 Airport of Zurich Noise Fund 18 Trend in traffic volume 19 Aviation 22 Non-aviation 23 Projects 24 Strategic developments 24 EMPLOYEES, SOCIETY AND THE ENVIRONMENT Flughafen Zürich AG as an employer 28 Social responsibility 28 Environment 30 Background discussion 38 CORPORATE GOVERNANCE 42 REMUNERATION REPORT 47 RISK MANAGEMENT 54 FINANCIAL REPORT Consolidated financial statements according to IFRS 63 Audit report 112 Financial statements according to the Swiss Code of Obligations (CO) 113 Audit report 124 2016 FINANCIAL CALENDAR 126 3 ADDRESS TO SHAREHOLDERS Zurich Airport posted a new passenger record in the previous year.